International Human

Resource
Management

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Introduction:

Define international human resource management

(IHRM)

Understand how corporate strategy influences IHRM

Explain the major IHRM functions: recruitment and

selection, training and development, performance
evaluation, compensation and benefits, and labor
relations

Discuss additional special concerns of managing

expatriate employees

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International Human
Resource Management
(IHRM)

The management of human resources

in global corporations

The management of expatriate

employees

The comparison of human resource

management (HRM) practices in a
variety of different countries
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Approaches to Managing
and Staffing Subsidiaries

Ethnocentric
Home country approach

Polycentric
Local approach

Regiocentric
Regional approach

Geocentric/Global
Global approach
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Choosing an Approach to
IHRM

Corporate international strategy

Political and legal concerns
Level of development in foreign locations
Technology and the nature of the product
Organizational life cycle
Age and history of the subsidiary
Organizational and national cultural
differences
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Recruitment and Selection

Processes through which an organization

takes in new members

Recruitment
Attracting a pool of qualified applicants for
the positions available

Selection
Choosing the candidate whose
qualifications most closely match the job
requirements
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Classifying Employees

Parent Country National (PCN)

Host Country National (HCN)

Third Country National (TCN)

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The Influence of Managing

and Staffing Approaches

Ethnocentric approach
PCNs

usually staff important

positions at headquarters and
subsidiaries

Polycentric approach
HCNs

generally work in foreign

subsidiaries
PCNs manage headquarters
positions
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The Influence of Managing

and Staffing Approaches

Regiocentric approach
PCNs

and managers from the

regioneither HCNs or TCNs
staff regional headquarters
positions
HCN's primarily staff local
subsidiaries

Geocentric approach
Chooses

the most suitable person

for a position
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Selecting the Right

Candidate
Need a balance between internal
corporate consistency and
sensitivity to local labor practices
Consider cultural values
Must comply with local labor laws

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Training and Development

Planned individual learning,

organization development, and
career development

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Delivery of Programs
Worldwide

Centralized
Ethnocentric

training originates
at headquarters and corporate
trainers travel to subsidiaries
Geocentric - training develops
through input from both
headquarters and subsidiary staff
and trainers could be from any
location
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Delivery of Programs
Worldwide

Decentralized
Training

on a local or regional basis

Local people develop training
materials and techniques for use in
their own area

Effective training considers cultural

background of trainees
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Developing Globally Minded

Managers
Companies whose CEO's have
international assignment
experience are better performers
Companies must identify managers
with global potential and provide
them various training and
development opportunities

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Performance Evaluation

Systematic appraisal of
employees performance within the
organization

Depends on overall HRM strategy

Should consider cultural

influences

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Compensation and Benefits

Develops and administers the salary

system and other forms of remuneration
Compensation and benefit levels reflect
local labor market conditions
Company usually develops policy to
offer salaries and benefits representing a
specific market level
Culture influences value put on various
compensation and benefit practices
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Labor Relations

Identifies and defines the roles of

management and workers in the
workplace
In many countries, government
regulated
Unions organized at the local, company,
regional (within country), or national
level
Number of workers within a country who
are union members varies
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Managing Expatriates
Must deal with the complexities of
employing and moving people
outside of their home countries
Cost a major factor

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Expatriate Failure Rates

Number who do not remain abroad
for the duration of their assignment
Varies by country and gender
Failure rate correlated with the
rigor of selection and training
procedures

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Expatriate Selection

Western European, Japanese

multinationals emphasize technical
competence and ability to acclimate
North American corporations select
mainly on technical competence
Behaviors successful at home may not
work abroad
Previous experience abroad may or may
not predict future success
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Cross-Cultural Training
Methods
Cultural Briefings

Area Briefings
Cases

Explain the major aspects of the host country

culture, including customs, traditions, every day
behaviors.
Explain the history, geography, economy,
politics, and other general information about the
host country and region.
Portray a real-life situation in business or
personal life to illustrate some aspect of living
or working in the host culture.

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Cross-Cultural Training
Methods
Role Playing

Culture Assimilator

Field Experiences

Allows the trainee to act out a situation that he

or she might face in living or working in the
host country.
Provides a written set of situations that the
trainee might encounter in living or working in
the host country. Trainee selects one from a set
of responses to the situation and is given
feedback as to whether it is appropriate and why.
Provide an opportunity for the trainee to go to
the host country or another unfamiliar culture to
experience living and working for a short time.
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How Situational Factors Influence the

Selection of a CCT Method
Degree of
Culture Novelty

High

Low
High

EXPERIENTIAL
Simulations
Field Trips
Role Plays
s
Degree of
od Interactive Language Training
h
Training
et ANALYTICAL
M
Rigor
Degree of
ng Sensitivity Training
i
n
ai Culture Assimilators
Job Novelty
r
T
Case Studies
Classroom Language Training
Films
FACTUAL
Books
Lectures
Low
Area Briefings
High
Low
Degree of Interaction with HCNs

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Cross-Cultural Adjustment

Expatriates must adjust to new work

situation, interactions with locals, and
new general environment
Company can facilitate adjustment by
providing training for expatriates and
their families before and during the
assignment
Expatriates often experience cultural
shock
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Culture Shock Cycle

Mood

High

Low

Months in a New Culture

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Expatriate Evaluation
Job abroad may include more than
what it does at home
Senior expat managers often
evaluated on financial performance
of subsidiary

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Expatriate Compensation
Influenced by general corporate
compensation policy
Expats usually receive extra
compensation and benefits
Different packages offered in
different locations

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Typical Expatriate Benefits

Overseas premium
Housing allowance
Cost of living allowance (COLA)
Moving expenses
Tuition for dependent education
Home leave
Tax reimbursement plans

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Expatriate Reentry
Reverse culture shock common
Many organizations fail to
successfully manage expatriate
reentry
Individuals may pursue
boundaryless career
Organizations can help to ease
reentry

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Changes in Global Mobility

New types of cross-border
employee transfers becoming
popular
Most important objectives for
cross-border transfers to transfer
skills and knowledge and to
develop and manage global
competencies

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Convergence or Divergence?

Large corporations
preference for
consistent
worldwide systems
Smaller companies
desire for more
professional
systems

Need to follow
local HRM laws
Development of
unique
techniques and
practices to suit
local cultural and
legal
requirements

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Conclusion:
Implications for Managers

Every international manager has

responsibility for effectively managing
human resources, therefore must
understand IHRM functions

Need to understand IHRM in order to

function and perform in the new global
arena.
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